Things to Know About New Oil-Train Rules

After nearly a year of scrutiny, the U.S. government proposed new regulations to make hauling oil and other flammable liquids by rail safer. The changes come in the wake of several fiery oil-train derailments, including one last summer that killed dozens of people.

If implemented, new rules on speed, breaking and testing of flammable liquids could become among the most sweeping changes ever to how hazardous material is moved about the country.

The old workhorse of the hazardous liquid fleet, the DOT-111 rail car, is in for an overhaul. The federal government wants to phase them out in two years. Companies can either upgrade the tankers, adding safety features or scrap them entirely.

There are about 80,000 DOT-111s built before 2011 on the tracks today, according to the Railway Supply Institute’s latest estimate, that would require substantial upgrades. Another 23,000 newer rail cars would need more minor changes.

The changes also impact train brakes, speed limits, routes through populated areas and how crude oil is tested before it is loaded onto cars.

80,000
The number of DOT-111 rail cars that would require substantial upgrades

The rules are meant to enhance safety in the wake of several frightening explosions. Concern started in July 2013 when a train carrying North Dakota crude derailed in Lac-Megantic, Quebec. The subsequent explosion and fire leveled part of the town and killed 47 people.

U.S. regulators focused on speed and new rules propose a 40-mile-per-hour speed limit for “high-hazard flammable trains.” But the requirement may only go into effect for certain urban areas.

Some rail officials have warned slower trains could snarl traffic across the U.S. freight system. And speed hasn’t been cited as a major issue in recent high-profile oil train derailments; a CSX train hauling crude was traveling only 24 miles an hour in April when it derailed and caught fire in Lynchburg, VA.

Until a few years ago, very little oil was moved on train tracks in the U.S. or Canada. According to the U.S. Transportation Department, there were 9,500 carloads of crude transported in 2008. Last year, there were 415,000 carloads.

Companies are tapping oil in places with new pipelines, including the Bakken Shale field in North Dakota. As oil production grew fast, trains were drafted into service to move the crude to refineries at the coast. Envisioned as a temporary fix, energy companies soon embraced rail’s flexibility to ship to the highest bidder for their oil instead of being locked into long-term pipeline contracts.

U.S. regulators released findings from samples it took of Bakken crude oil on Wednesday. It concluded “data show that crude oil from the Bakken region in North Dakota tends to be more volatile and flammable than other crude oils.” This finding was reported earlier by the Wall Street Journal.

The oil industry fiercely disputes that idea. The American Petroleum Institute dismissed the government’s analysis as “speculation” and said Bakken crude doesn’t carrier a higher transportation risk than other types of oil.

Data show that crude oil from the Bakken region in North Dakota tends to be more volatile and flammable than other crude oils.